The cryptocurrency industry is making a unified push for regulatory clarity in the U.S., aiming to protect innovation while maintaining national leadership in the global crypto space. In a landmark initiative, over 65 crypto firms—including prominent names like Solana Policy Institute, Exodus, Pantera, and Uniswap Labs—recently sent a detailed letter to the U.S. President, highlighting critical steps needed to foster growth and safeguard the industry.
What the Crypto Industry is Demanding
According to the letter, the past year has been a turning point for U.S. crypto regulations, with notable advancements such as the overturning of the IRS Broker Rule and the passage of the GENIUS Act. However, industry leaders insist more needs to be done to build a robust framework for cryptocurrency innovation.
The letter calls for several key actions:
- Tax Clarity: Staking and mining rewards should be taxed only upon sale or exchange, with technical actions like bridging tokens remaining non-taxable events.
- Small Transaction Exemptions: Inclusion of de minimis tax rules, such as a $600 exemption for small crypto transactions, to encourage mass adoption.
- DeFi and Blockchain Development: The creation of “safe harbors” and regulatory sandboxes to allow decentralized finance (DeFi) projects to experiment without fear of prosecution.
- Cybersecurity and Consumer Protection: Collaborations with agencies like NIST and the Department of Treasury to strengthen cybersecurity across digital asset networks.
Regulatory Flexibility and Consumer Rights
Additionally, the letter emphasizes streamlining processes across agencies like the SEC and CFTC to avoid conflicting rules and delays. The crypto firms are advocating for clear guidelines on self-custody, ensuring Americans retain access to their digital assets without unnecessary barriers. Further, they urge the administration to adopt a more collaborative regulatory stance, avoiding the controversial tactic of “regulation by prosecution.”
Boosting Innovation with Fair Rules
One of the standout points in the letter is a request for exemptions to help U.S.-based developers thrive in the rapidly growing DeFi space. This includes supporting free expression through software development, aligned with the First Amendment. With proper guidance, experts argue, the U.S. can maintain its leadership role while protecting consumers and boosting groundbreaking blockchain advancements.
Protecting Innovators and Developers
Another hot topic raised in the letter is the ongoing case of Roman Storm, a blockchain developer arrested for his involvement in Tornado Cash. The group urges the Department of Justice to drop charges, stating that developing open-source software should not be a punishable offense. Such actions could dissuade future progress in blockchain development, jeopardizing U.S. innovation.
Why Action is Needed Now
Time is of the essence for the U.S. crypto industry. Without regulatory clarity, innovation risks shifting to other nations with more welcoming policies, leaving U.S. businesses at a competitive disadvantage. This unified call to action reflects the industry’s commitment to working alongside regulators to create a balanced environment that benefits both innovators and consumers.
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Stay tuned for updates on this developing story as the crypto world navigates its path in U.S. policy and regulation.
